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2016 (3) TMI 674 - PUNJAB & HARYANA HIGH COURT

2016 (3) TMI 674 - PUNJAB & HARYANA HIGH COURT - 2016 (43) S.T.R. 189 (P & H) - Exemption from service tax on construction service provided to in case of religious use but not to charitable purpose - Constitutionality of clause 13(c) of Notification No. 25/2012-ST, dated 20.6.2012 - It provides class legislation there being no intelligible differentia of reasonable classification in religious charitable institutes and educational charitable institutes and both registered under Section 12AA of th .....

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y competence if the power to issue the same does not emanate from the statutory provisions. Equally, it can also be struck down on the ground that it is arbitrary, unreasonable or unjust. Rather, clause 13(c) of the notification dated 20.6.2012 exempts building owned by an entity registered under Section 12AA of the Act and meant predominantly for religious use by general public from payment of service tax and is, thus, a beneficial exemption granted thereunder which cannot be said to be unconst .....

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al. Decided against the petitioner - CWP No. 25471 of 2015 - Dated:- 4-2-2016 - Ajay Kumar Mittal And Raj Rahul Garg, JJ. For the Appellant : Mr Kumar Vishav Aggarwal, Adv ORDER Ajay Kumar Mittal, J. 1. Prayer in this petition is for declaring clause 13(c) of Notification No.25/2012 Service Tax dated 20.6.2012, Annexure P.2 as unconstitutional, void and illegal as it provides class legislation there being no intelligible differentia of reasonable classification in religious charitable institut .....

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ided technical institutions in the State of Punjab. The colleges associated with the petitioner association are imparting education in the field of engineering, M.Sc., MCA, MBA, BBA and other subjects. The main aim and object is to provide education to the general public at large by its various institutes. The petitioner is getting construction of its educational buildings from local contractors. Earlier the service tax on constructions in respect of charitable educational institutes was exempt .....

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2. The relevant part of the notification reads thus:- "GSR...(E). In exercise of powers conferred by sub section (1) of section 93 of Finance Act 1994 (32 of 1994) (hereinafter referred to as the said Act) and in supersession of notification number 12/2012 - Service Tax, dated the 17th March 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub section (i) vide number GSR 210 (E) dated the 17th March 2012, the Central Government being satisfied that it is necessary .....

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public." 5. A perusal of the above shows that the services provided by entities registered under Section 12AA of the Act and meant primarily for religious use by general public shall be exempted from service tax. 6. A statute enacted by Parliament or legislature can only be struck down by courts on two counts which are viz. (a) lack of legislative competence; and (b) violation of any of the fundamental rights granted in Part III of the Constitution of India or any other Constitutional prov .....

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ways viz. the division of legislative powers between the States and the federal government and the fundamental rights (Bill of Rights) incorporated in the Constitution. In India, the position is similar to the United States of America. The power of the Parliament or for that matter, the State legislatures is restricted in two ways. A law made by the Parliament or the legislature can be struck down by courts on two grounds and two grounds alone viz. (1) lack of legislative competence and (2) vio .....

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